Methodology

The core formula

For a fixed-rate loan, the monthly principal and interest payment is M = L × r × (1 + r)n ÷ ((1 + r)n − 1), where L is the loan amount, r is the annual rate divided by 12, and n is the number of monthly payments. When the rate is zero, the payment is L divided by n. Each month, interest is the balance times r, and the rest of the payment reduces the balance.

Other monthly costs

Property tax is the price times the annual tax rate divided by 12. Insurance is the yearly premium divided by 12. PMI is the loan amount times the PMI rate divided by 12 and applies while the balance is above 80% of the home price and the down payment is below 20%. HOA dues are added as entered.

Loan programs

FHA uses the upfront premium of 1.75% and HUD's annual premium table by term, base loan and loan-to-value. VA uses the funding fee by down payment and first or repeat use. USDA uses a 1% upfront fee and a 0.35% annual fee on the remaining balance. Government loan limits and premiums are reviewed yearly.

Comparison tools

Refinance, points, payoff, bi-weekly and recast tools re-run the loan month by month and compare cash paid plus the balance still owed after your holding period. Rent versus buy tracks net worth for both paths, with the difference in monthly cost invested at your chosen return. The affordability tool searches for the price at which the full payment equals your ratio-based limit. HELOC estimates assume the full amount is borrowed at the start at a constant rate.

Estimates we label as approximate

The reverse mortgage tool uses an approximation of HUD's principal limit factor table and says so on the page. Users can enter a lender's factor for a closer figure.

Rounding and limits

Displayed dollar amounts are rounded, while calculations use full precision. Results do not include closing costs, taxes on investment gains, inflation or mortgage interest deductions unless a page says otherwise.